20VC: Perplexity's Aravind Srinivas on Will Foundation Models Commoditise, Diminishing Returns in Model Performance, OpenAI vs Anthropic: Who Wins & Why the Next Breakthrough in Model Performance will be in Reasoning
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
Value in AI companies lies in people, not just models
The value of companies like open AI and anthropic goes beyond the models they create. It lies in the specific group of talented individuals with tacit knowledge who innovate algorithmically to train frontier models and make real reasoning breakthroughs. These individuals and their unique expertise, along with the accumulation of compute, are the reasons for the high valuation of these companies. The talent producing the models is not commoditized but rather paid well to stay, and their knowledge remains within the company. Thus, the true commodity is not the models themselves but the people behind them, making these companies highly valued.
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